Should You Pay Estimated Taxes?

For most people tax time only comes once year. However, for anyone who has to pay estimated taxes a large tax bill could be due several times a year. Again, most people do not have to worry about paying estimated taxes, but there are several circumstances that will put you in that category. The most common reason people need to pay estimated taxes is because they have self-employment income, but there are other reasons as well. You may need to pay estimated taxes if any of the following apply to you.

  • You or your spouse earned self-employment income.
  • If the stock market was kind and you cashed out a large portion of your gains, but you did not adjust your withholding on your W-4, then you might need to pay estimated taxes.
  • If you hire a nanny and pay her federal payroll tax for her, then you can make those in quarterly estimated taxes.
  • Any income you earned that was not subject to federal withholding on your W-4 could be subject to estimated taxes.

Not everyone who falls into one of these categories needs to pay estimated tax. So how do you decide if you should or shouldn’t pay these taxes? There are many answers to this question, but the bottom line is if you made enough income from untaxed sources that you will cause you to owe taxes when you file your return then you should make estimated tax payments. If you fail to do so, then you could pay a penalty. On the other hand if your deductions and credits will be more than the tax amount you would owe on this income then you are most likely OK in skipping these estimated payments. If you still aren’t sure whether or not you should make estimated tax payments, then contact us at GROCO for more advice. We can look at your situation and help you determine if these payments are necessary. Please contact us for help at 1-877-CPA-2006, or click here.

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FAMILY LIMITED

Family Limited

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To receive our free newsletter, contact us here. Subscribe our YouTube Channel for more updates. Alan Olsen, CPA Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world. Alan L. Olsen, CPA, Wikipedia Bio GROCO.com is a proud sponsor of The American Dreams Show. American-Dreams-Show-Accounting-firm-in-ca-cpa-tax-advisors-groco-alan-olsen The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business. Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind. The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most. They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more.. American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included: Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work… Untitled_Artwork copy 4 MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness. It’s mission statement: In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges. Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

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